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<< back to all ArticlesAlberta Court of Appeal Revisits Costs Awards in Professional Regulatory Matters
Charkhandeh v College of Dental Surgeons of Alberta, 2025 ABCA 258
Overview
In Charkhandeh v College of Dental Surgeons of Alberta, the Alberta Court of Appeal considered an appeal by Dr. Charkhandeh from the decision of the Appeal Panel of the College of Dental Surgeons of Alberta. Dr. Charkhandeh was a dentist found guilty of five counts of unprofessional conduct relating to sexual interactions with the complainant. Dr. Charkhandeh appealed the Hearing Tribunal’s findings of misconduct and the sanctions and costs imposed upon him.
Importantly for professional regulatory organizations and members alike, in hearing Dr. Charkhandeh’s appeal, the Alberta Court of Appeal reviewed the framework for making costs awards in professional disciplinary matters. In appropriate circumstances, costs awards permit disciplinary tribunals to recuperate the costs of disciplinary investigations and hearings from an investigated member. The Court’s decision revised some of the relevant considerations for awarding costs in this context.
The New Approach to Costs in Professional Disciplinary Matters
The Court noted that costs awards are discretionary, and that the discretion to award costs under the Health Professions Act should be exercised in a principled, transparent, and reasonable manner.
The Court stated that there was no presumption in the statutory language of the Health Professions Act as to who should bear the burden of costs. As a result, it would be an error for a tribunal to award costs on a presumption that costs should be awarded, or that either the disciplined member or the College should bear the costs. The Court stated that in every case, the decision maker must first carefully consider whether costs are warranted, and if so, the amount of costs.
The Court noted that a wide range of factors are relevant to awarding costs. Without exhaustively listing all the relevant factors, the Court stated that any factors considered must be relevant to the costs issue itself and to the competing alternatives of allocating costs between the regulator and the professional.
The Court identified some relevant factors including:
- The number of allegations and overall success in the hearing;
- That costs are not intended to be a form of sanction; rather they are intended to allocate the costs of the proceedings and relate to the process of the hearing, not the substance of the charges; and
- Whether costs have been increased due to the unreasonable or inefficient litigation conduct of either party.
The Court clarified that the seriousness of the charges is primarily relevant to the sanction, not costs. While the overall costs of the hearing may be impacted by the seriousness of the allegations, the length and extent of the hearing and conduct of the parties are more relevant to assessing costs, rather than the seriousness of the charges in themselves.
The Court also discussed limits on the amount of any costs awards. It stated that the amount of any costs awarded must be reasonable and proportionate:
- The expenses must be reasonably incurred having regard to the nature of the investigation, the allegations, and the hearing process;
- The amount paid by the regulator must be fair and reasonable;
- It must not only have been reasonable for the College to have incurred the costs but it must also be reasonable to transfer the burden of those costs to the professional;
- The costs must be proportionate to the issues resolved, the circumstances of the member, and the overall burden it places on him or her.
The Court stated that tribunals must have a reasonable idea of the types of expenses that are included and make some assessment of whether those expenses were reasonably incurred. Tribunals must not award a percentage of expenses incurred without first assessing the reasonableness of those expenses.
However costs are calculated, the ultimate award of costs cannot be an unduly onerous or “crushing” burden on the professional. The Court stated that this factor effectively places a cap on proportionate costs awards in many cases. An award of costs should not be so great that there is no realistic prospect of the professional being able to pay them.
The Court stated that, generally, professionals should not be required to pay all or a significant portion of the expenses associated with the infrastructure of the hearing, such as travel expenses and daily allowance for the tribunal members. Rather, the types of expenses that the professional should be expected to pay are those costs discretely associated with the hearing itself.
The Court also noted that the bulk of expenses tend to be legal fees, which must be examined for reasonableness. The complexity of the hearing is a relevant factor in determining what costs are reasonable to transfer to the member.
The Court added that generally it will not be reasonable to charge a disciplined member the costs of having counsel for the tribunal sit through the entire hearing or draft the reasons for decision. In many cases, fees relating to independent legal advice will be a cost borne by the College that cannot be passed on to the regulated member.
Applying the New Approach to Costs to the Award Under Appeal
The Court of Appeal reviewed the costs orders of the Hearing Tribunal and Appeal Panel in light of its statement of the relevant principles. The Hearing Tribunal and Appeal Panel each awarded 75% costs awards, totaling $429,226.
In making its own assessment on costs in light of the principles set out in the decision, the Court determined that, despite the significant costs incurred in the complex investigation and hearing, an award of $50,000 for the costs of the investigation and hearing and $10,000 in costs of the appeal to the Appeal Panel was appropriate.
Key Takeaways and Considerations Regarding Costs in Professional Disciplinary Proceedings
The Court of Appeal’s decision in Charkhandeh introduces a revised framework for costs awards in professional disciplinary proceedings. The Court of Appeal noted that going forward, costs in disciplinary proceedings should be awarded based on the wording of the statute and the principles set out in Charkhandeh and clarified that the approach in the Court of Appeal’s 2022 decision in Jinnah v Alberta Dental Association and College should not be used.
This approach requires that tribunals consider the reasonableness of costs incurred and whether it is reasonable to transfer the costs of proceedings onto a regulated member. Further, while the Court did not set a hard monetary cap on costs, it set a clear direction that any costs award must not be crushing and disproportionate to the issues. This may mean that certain costs are not able to be transferred to a disciplined member. Indeed, the Court identified certain costs that should not be transferred to the member.
Certain aspects of the Court’s approach to costs are rooted in the language of the Health Professions Act. Accordingly, the language of the relevant governing legislation will be an important consideration in determining how closely the Charkhandeh costs framework applies in the context of regulating other professions.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.
